An investment and wealth management firm predicts that the rise in establishments that combine eating, drinking and playing will help sustain the restaurant industry

As entrepreneurs Monty and Kerri Lockyear contemplated opening a venue that combined eating and drinking with playing, they wanted to ensure the entertainment aspect was highly active and prompted people to socially interact with one another.

They accomplished their goal with the opening of Smash Park, an activity-based restaurant and bar with pickleball, bocce ball, foosball, bags, shuffleboard and variety of other games.

“We don’t see people on their phones here,” said Kerri Lockyear, who with husband Monty 14 months ago opened Smash Park in West Des Moines, east of Jordan Creek Town Center. The business has been so successful, the couple plan to sell franchises this year and are exploring opening a second location in downtown Des Moines.

In the past five or so years, the number of venues nationwide that combine dining with entertainment has swelled with the rapid expansion of businesses like Dave & Busters and Top Golf. (The industry buzzword is “eatertainment.”)

People are not content with just going out to dinner, sitting and looking at each other or their phones, eating and going home. They want “an experience,” Monty Lockyear said.

“We can see in the restaurant business that casual dining is going down; delivery from restaurants to your home is going up,” he said. “To get people to go out and eat somewhere, they want something more than to just sit down at a table; they want the complete experience.”

In a research report published last December, the Chicago-based investment and wealth management firm William Blair estimated that eatertainment accounted for about 2% of the nationwide full-service dining market and predicted it would soon double. “Eatertainment’s time has come,” the research analysts wrote in their report.

Data collected by the National Restaurant Association shows that 63% of food bought at a restaurant is consumed off the premises. However, that percentage could begin to shrink with the rise in eatertainment businesses, according to the William Blair research report. “We increasingly believe that concepts that create unique (and Instagrammable) experiences will be the winners in driving sustainable four-wall traffic,” the report said.

That growth can be seen in the Des Moines area with the opening of Smash Park and the announcement that Dave & Buster’s is eyeing a location in Jordan Creek. In addition:

-- Ricochet Game Lounge & Social Bar, an indoor gaming lounge with a pingpong focus, is expanding in a new location.

-- Game Day, a family entertainment center, is opening yet this year in Merle Hay Mall.

-- Spare Time, a New England-based bowling entertainment center, plans to open in West Des Moines in 2020.

-- Great Escape – The Ultimate Experience, a Pleasant Hill family entertainment center with bowling and other activities and an attached restaurant and bar, recently expanded, doubling its laser tag area and increasing the number of arcade games to 50 from 13 including adding a four-player virtual reality game.

Also, the popular East Village arcade bar Up-Down doubled its size earlier this year, adding a kitchen and second bar, and the Operating Room, an arcade bar in West Des Moines, opened a second location last spring in Ankeny. Additionally, the Des Moines area has at least four indoor golf venues, a couple of ax-throwing-themed bars and several movie theater complexes that offer wide selections of alcoholic beverages and foods. In Ankeny, B&B Theatres also has 12 bowling lanes and an arcade.

Gen Z and millennials, whose adult ages range up to 38, want experiences rather than things, said Shane Zimmerman, a commercial banking leader for Wells Fargo in Central Iowa. And it is that group that is the target audience for eatertainment establishments, he said.

“This group wants their dining to be fun and engaging and social, not only on social media but engaging with one another,” Zimmerman said. “They want to live, work and play in the city in which they live.”

Eatertainment isn’t new

Combining dining with entertainment is not a new concept. Among the first was Chuck E. Cheese, a kid-oriented venue with a variety of electronic games and pizza that opened its first store in 1977 in California.

In 1982 Dave & Buster’s mimicked the concept, targeting it at adults and families. The Dallas-based entertainment and casual dining center has 130 stores, adding 13 in the past year with plans to open at least six new venues before the end of its fiscal year in February 2020.

The company has upgraded its food menu, plans to add 40-foot-wide LED screens in its dining areas, and began virtual reality games like Jurassic World and Terminator with plans to expand its offerings. According to the research report, the company is also testing fast-casual foods including food-truck-style tacos in its Dallas location.

Officials with Dave & Buster’s did not return multiple phone calls.

The growth in eatertainment venues is being driven mostly by young adults, Monty Lockyear said.

“They value more experiences versus products and convenience,” he said. “We can see in the restaurant business that casual dining is going down; delivery from restaurants to your home is going up.

“To get people to go out and eat somewhere, they want something more than to just sit down at a table; they want the complete experience.”

“What is it that malls have a lot of -- Parking,” he said. “Those property owners are looking for alternative sources of revenue that will occupy their empty spaces. [Eatertainment] businesses need to provide parking to their customers.

“Mall owners know it’s about the experience, and that’s why you see more of these types of entertainment and dining venues looking at malls.”

Liz Holland, Merle Hay Mall owner, said a 2017 survey by a mall property owner found the top things desired by shoppers were grocery stores, day spas, bowling alleys and breweries.

If mall owners don’t change what they offer to millennials and others, they’ll become obsolete, Holland said during a keynote speech this fall at the Iowa Commercial Real Estate Association’s annual conference.

“It doesn’t matter if you’re industrial, residential, commercial, office, retail – if you’re obsolete it will be impossible for you to continue to operate the same way that you have in the past,” she said. “So what do we do with that retail square footage so we don’t become obsolete?”

At Merle Hay, it’s meant opening Flix Brewhouse about five years ago and leasing space to Game Day, which is scheduled to open yet this year.

“Millennials are not interested in things; they are interested in an experience,” Holland said. “They don’t want things under the Christmas tree anymore; they want tickets to a show.”

Capitalizing on desire for experiential entertainment

Technology advancements in the past two decades have made it possible for many people to work away from traditional offices or, when they are at work, have scant interaction with co-workers.

“By the end of the day, you’re ready to interact with other people,” said Mike Utley, who is partnering with Brad Argo to open Ricochet Game Lounge & Social Bar in street-level space at Capital Square in downtown Des Moines. “They want to be in an environment where they can actually have a little bit of exercise, get up and move a bit and talk to other people.”

While sports and neighborhood bars are popular, little interaction occurs among customers. Most are watching a game or scouring their phone, he said.

“Our atmosphere will encourage [customers] to move around and meet other people,” Utley said. “What we really want to focus on is getting people to socially interact with each other.”

Argo is the concept developer of the original Ricochet, Des Moines’ first game lounge that opened in the East Village in 2014. The new Ricochet, slated to open in early 2020, will include game tables, lounge areas and a full-service bar that features local craft beers and cocktails. Games will include regulation-size table tennis, pool tables, foosball, billiards, bags, shuffleboard and darts.

Ricochet will have a bar but won’t serve food. Instead, food trucks may be set up in the adjacent Cowles Commons or on Walnut Street, or food can be delivered from restaurants with whom Ricochet contracts. In addition, private events can have food catered.

“One of the reasons why we’re not serving food is because people love variety and being able to pick what they want to pick for their group,” Utley said.

“Also, the restaurant businesses are pretty saturated right now.”

Ricochet’s primary focus is providing interactive games played on high-quality equipment, Utley and Argo said.

“You’ve got a lot of breweries right now putting in games because they have so much square footage,” Argo said. “They’re breweries with games.”

Added Utley: “The games are the vehicle that are bringing people together.”

Does Des Moines have too many eatertainment venues?

The growth in eatertainment establishments in the Des Moines area is outpacing that of other, larger markets, observers say. They worry, though, that the fast-paced growth will inundate Des Moines and its suburbs with eatertainment venues.

“You’re seeing a lot more of the eatertainment-type places coming to Des Moines than you do other places,” said Monty Lockyear of Smash Park. “Omaha, for instance, doesn’t have nearly as many options that Des Moines has.”

The increasing competition could mean some businesses may not survive, observers said.

“Just like with any other kind of business, there’s going to be a portion of places that people gravitate toward and then there’s going to be other businesses that drop off or close,” Utley said. Businesses that succeed will be the ones that continue to evolve, offer quality food and variety of drinks, and encourage social interaction among people, he said.

Zimmerman predicted the next wave of dining and entertainment venues will center around the growing popularity of competitive virtual gaming. He said the concept is occurring in other places in the world and in a few U.S. locations. The e-games involve activity as well as social interaction with others, he said.

“People are congregating and playing these video games in a competitive setting – football, hockey, Fortnite and others,” Zimmerman said. “They’re competing not just with the people in the room but with others around the world.”